The Canadian Radio-television and Telecommunications Commission (CRTC) has introduced a new rule that requires online streaming services like Netflix and Spotify to pay a fee to support the country’s broadcasting system. The rule applies to services that generate at least $25 million in revenue in Canada and are not affiliated with a Canadian broadcaster. Under the new regulation, these streaming services will need to contribute 5% of their revenues to support content produced in Canada.
The CRTC estimates that the fees will provide an additional $200 million annually, which will be directed towards areas of immediate need in the Canadian broadcasting system, such as local news, content in French, and indigenous content. The rule is set to take effect starting with the 2024-2025 broadcasting year, expected to begin this fall. Streaming companies will have some influence over where their contributions are directed, according to the CRTC.
Revenue derived from podcasts, video games, and audiobook services will be exempt from this rule.
Streaming services required to fund Canadian content
CRTC CEO and chair Vicky Eatrides stated, “Today’s decision will help ensure that online streaming services make meaningful contributions to Canadian and Indigenous content.
The CRTC will continue to move quickly, listen carefully, and take action as we implement the new legislation.”
However, the Motion Picture Association-Canada (MPA-Canada), which represents Netflix, Disney+, Paramount, and other streamers, has expressed opposition to the fee. MPA-Canada president Wendy Noss said, “We are disappointed in today’s decision that reinforces a decades-old regulatory approach designed for cable companies. Today’s discriminatory decision will make it harder for global streamers to collaborate directly with Canadian creatives and invest in world-class storytelling made in Canada for audiences here and around the world.”
The industry group also highlighted that global studios and streaming services currently spend $6.7 billion annually on producing Canadian content.
The new regulation follows the Broadcasting Act passed by the Canadian parliament in 2023, which tasked the CRTC with modernizing the country’s broadcasting system. Major players in the industry, such as Netflix, Warner Bros. Discovery, Amazon, and Spotify, have not yet responded to requests for comment.
